Tag Archives: banking

Money is a near-universal social institution. It evolved to support human cooperation and to control and coordinate the life of humankind. Like other core institutions, such as marriage and language, the forms that money takes may differ widely. The values and norms governing money’s use, and the practices associated with it, also vary widely. For…» Continue Reading

The world took time to get into the money trap. But with one bound it can be free. Since the 1970s governments have tried various approaches to the challenges of managing money. In the 1970s, they put full employment top. They used monetary policies to expand demand, taking risks with inflation. The results included high…» Continue Reading

12 points: 1. Central bankers, who were by and large not responsible for supervision pre-crisis , immediately sought to pin the blame for it on regulators, diverting attention from monetary policies – stoking the credit boom, failing to sound the alarm for what they were responsible for, which often included a duty to monitor the…» Continue Reading

In The Money Trap, I argue that our problems result from the way in which we have applied a particular concept of money – the state theory of money. This dominated government policy in the 20th century. As Keynes said, all modern money is state money – it is seen as a creature of…» Continue Reading

Martin Wolf’s recent radio programme – “How Low can Rates Go?” – described and illustrated the dilemmas facing monetary policy-makers. Nine years from the start of the great financial crisis, Wolf reported, economies had still not returned to “normal”. Capitalism was perceived by many to be failing to deliver; globalisation a con trick. The political…» Continue Reading

Interests barring change Powerful interests benefit from the existence of the money trap. These interests include the state and the monied elite. They benefit, at least in the short to medium term, from official manipulation of money under the present (IT plus CBI) regime – the state from cheap finance, the monied elite from the…» Continue Reading

Central banks confront the kind of scenario outlined in The Money Trap. In the book, I anticipated a world of generalised deflation, with zero nominal rates on risk-free assets. At the time of publication, in 2012, this seemed unlikely, to say the least. But it is materialising. The challenge now is to seize the…» Continue Reading

There is an urgent need to reintegrate society with its productive side through broadening share ownership. This is the theme of a new book, “Debtonator”. (Elliott and Thompson, £9.99), by Andrew McNally, an experienced institutional investor. In a lively account, McNally shows how equity finance benefits society, companies and individuals. Equity should form the basis…» Continue Reading

Central banks disown any responsibility for stock markets; yet we all know they take market conditions into account. How will they respond if the turmoil resumes? Apparently the banks want central banks to get interest rates back to “normal”. Axel Weber, head of UBS, former head of the Bundesbank and former council member of the…» Continue Reading